Generative AI to Boost Productivity, Skill Creation, Report

MIT. Google-authored report likens generative AI’s transformative potential to electricity

Ben Wodecki, Jr. Editor

May 3, 2024

3 Min Read
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Generative AI holds the potential to accelerate economic growth but could also bring about a marked transformation in job skills, according to a new report.

The Generally Faster: The Economic Impact of Generative AI report by Andrew McAfee, an MIT principal research scientist, was supported by Google researchers during his tenure as Google’s inaugural visiting fellow in technology and society.

In the report, McAfee designated generative AI as a "general-purpose technology”— in that it’s a technology that accelerates overall economic growth, on par with the likes of the steam engine or electricity.

Despite being early in its life cycle, generative AI is already providing users with sizable productivity gains the report suggests. The technology will “increase and spread as people and organizations come up with complementary innovations that leverage generative AI’s capabilities.”

The report referenced an OpenAI estimation that generative AI solutions could enable 80% of U.S. workers to perform at least 10% of their tasks twice as quickly.

Generative AI could scale faster than other general-purpose technologies as the existing digital infrastructure is already in place, the report claims.

“Once new generative AI systems are developed they can be deployed around the world as quickly as web pages and apps can,” McAfee wrote. “A large and growing number of powerful applications using this technology are immediately available at no cost to anyone with an internet-connected device.”

Related:Generative AI Funding Hits $25.2 Billion in 2023, Report Reveals

The visiting Google author wrote that fears of large-scale job losses from generative AI were “overblown.”

A 2023 Goldman Sachs report suggested generative AI could replace up to one-fourth of global jobs, which equates to 300 million roles.

The report suggests that generative AI won’t be as damaging to the job market.

“The history of general-purpose technologies shows that the growth they bring is accompanied by strong demand for labor,” McAfee said.

He wrote that rapid changes to transitions will require effective reskilling efforts. McAfee’s report that increased generative AI adoption will reduce the demand for some skills and create new ones.

Roles where skills focus on creativity and analysis are most likely to be impacted by generative AI, the report suggests, along with tasks like problem-solving and persuasion.

“Some highly educated and well-paid workers who make a living via these skills today will have to shift what they do in order to maintain or increase their value in the labor market,” the report reads.

Related:Apple, Nvidia Lead AI PC Sectors, Enterprise Market up for Grabs

Several big-name tech firms are already pledging financial support to support such efforts, with Microsoft, Google and Amazon all setting lofty goals to upskill millions of workers over the next few years.

The report notes that an aging workforce combined with ongoing labor shortages provides an opportunity for generative AI to transform employment.

“These efforts will be able to draw on generative AI itself, a tool with the unique

ability to help people learn how to use it better,” McAfee wrote. “Because generative AI accumulates knowledge and makes it available on demand, it’s particularly effective at improving the performance of entry-level employees, helping with wage inequality.”

Instead, layoffs should be expected from companies not investing in AI, the report suggests.

“Research conducted over the last decade reveals that companies investing heavily in machine learning are not the ones conducting layoffs. Workforce reductions come instead from companies that did not embrace the technology. We predict that a similar pattern will hold with generative AI.”

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About the Author(s)

Ben Wodecki

Jr. Editor

Ben Wodecki is the Jr. Editor of AI Business, covering a wide range of AI content. Ben joined the team in March 2021 as assistant editor and was promoted to Jr. Editor. He has written for The New Statesman, Intellectual Property Magazine, and The Telegraph India, among others. He holds an MSc in Digital Journalism from Middlesex University.

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